Section 1

research

Free Trade

San Francisco Bay cargo ship

San Francisco Bay cargo ship by Bernard & Myrtha Garon / BY CC

Free trade - the absence of governmental barriers to international trade - has been an integral part of conceptions of free enterprise since the early 19th century. The reason for its centrality is that free trade is essential to securing the comparative advantages that, like specialization and the division of labor, are at the heart of the efficiencies attributed to free enterprise economies. The importance of a free trade component to the SID project is enhanced by the enormous domestic political pressures that globalization has produced on governments. Pressures from both domestic producers and workers have led various governments to adopt myriad policies that restrict or enhance their international trade. Moreover, for political reasons, these policies have varied across both trading partners and economic sectors.

A measure of a nation's commitment to free trade, to be useful, must reflect these subtleties. Unfortunately, the most readily available sources of data on international trade contain only limited information on tariff rates for selected countries in a single year. This led the Center to support the Free Trade Project, which was conceived and supervised by Todd Allee. In contrast to existing efforts to archive international trade data, the Free Trade Project includes information on tariffs and non-tariff barriers, captures trade-restricting as well as trade-enhancing policies, and reflects societal and governmental attitudes toward trade, not just trade policies.